Black Males, Wealth Depreciation & Racism

I was born in 1966 to a mom who would have been a hippie or academic if she did not get married at 18 and start having kids so early.  My mom was passionate about her fight against oppression in all forms and impressed upon my sisters and me the importance of social equity for all regardless of race. The institution of slavery and its antithesis embodied in the Civil Rights movement, made it easy for a young kid like me to see the difference between social unfairness and social fairness. The distinction was made clearer when my mom read two books with me were about Dr. Martin Luther King Jr. and Jackie Robinson. I could not understand why people could be so awful to other people. Separate bathrooms and water fountains because of skin color? Even as a kid, this seemed crazy, outrageous. Why would someone hate someone else simply because of their skin color? Baseball fans yelling the “n-word” at Jackie Robinson, the first Black player in the big leagues, disturbed me then and still does now.

A recent NY Times article based on research at Stanford, Harvard, and Census Bureau data, describes the effects of racism on Black boys; even those who grow up in wealthy families are more likely to end up poor than to remain at the level of wealth in which they were raised. The same is not true for Black girls. “Even when children grow up next to each other with parents who earn similar incomes, black [sic] boys fare worse than white boys in 99 percent of America…Black men raised in the top 1 percent — by millionaires — were as likely to be incarcerated as white men raised in households earning about $36,000.”

This article and other research referred to in it finds that it is not class that explains this dynamic (as frequently thought to be the case) but pervasive, structural racism and its particularly strong effects on Black males.  The Times article further points out that “boys, across races, are more sensitive than girls to disadvantages like growing up in poverty or facing discrimination. While black [sic] women also face negative effects of racism, black [sic] men often experience racial discrimination differently. As early as preschool, they are more likely to be disciplined in school. They are pulled over or detained and searched by police officers more often.”

The article is well worth a read. One area of my consulting work with wealthy families focuses on educating and coaching parents about raising children in a wealth context. Unfortunately, however, I am not coming across Black families of wealth in my practice and even within the related organizations to which I belong, there are rarely Black professionals. This does not mean they do not exist, but it has not been my experience to meet them despite my work across the country.

As a result, I see a great opportunity and consequential social benefit in developing communities for Black families of wealth, and Black professionals that are focused on facilitating the perpetuation of their success (in financial and other realms) and connecting these families and professionals to opportunities for mentorship and support for impoverished Black communities. If you know of organizations along these lines – please get in touch with me and share what you know. If you’d like to make an impact on this issue, let’s put our heads together.

I did Google around looking for organizations for “Black family wealth” and “Black wealth advisors”. What tended to come up were articles about the drastic nature of wealth disparity and how difficult and challenging it is to be a Black professional.

Disheartening.

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged , , , , | Posted on by Jeff Savlov

Parenting as Governance

Governance can be intimidating to business families and legacy wealth families who may not have operating businesses any longer but share and manage complex assets. This is especially true if they have not educated themselves about good governance and committed themselves to it. Governance is crucial for achieving both long term business/financial success and family harmony.

Simply put, governance is coming together and getting clear about how decisions will be made, who will be involved with making decisions and in the business of the family generally, how information will be shared and overall setting and managing of expectations. I’m referring specifically to governance that relates to the interplay of family and shared assets rather than of a business alone.

In my view, parenting – and in particular parenting that takes into account the context of a family’s business and financial success – is the earliest and most powerful foundation of good governance. When it is missing, the consequences are glaring.

Recently I worked with an immigrant who came to the U.S. as a young child, experienced harsh poverty and worked incredibly hard to create a business empire. He wanted to make life easier for his son and daughter: he asked very little of them, bought them everything they wanted and more, took them into the business and paid them much more than market value, (they never would have earned positions like these on their own) and he did little to train them. His heart was in the right place, but he developed entitled children with minimal skills. He did much the same with his grandkids by buying them expensive cars as soon as they got their licenses and put them all through private K-12 and college and gave them no-show jobs with his companies. His children were making bad deals and losing the company millions, and the grandkids were floundering, unemployed and living off their no-show job income.

The founder was in tears. I helped him to see that while he acted out of love, he had made life too easy for the rising generations. HE had a hunger based in surviving while they had wanted for nothing and little was expected of them.

Some may see it as a leap to connect parenting a young child to family governance.  But in my experience, I frequently see tough situations in the world of enterprising families that could have been avoided with more enlightened and thoughtful parenting beginning at the earliest years.

It is necessary that any child, regardless of family wealth or poverty, be held to high expectations, to work for what they get, to contribute to the family/household for no money (at least some of the time), to endure and grow from frustration and failure, to earn money and pay for a least some of the things they want.

I also see wonderful, close families who pull together, pitch in, and work very hard. They earn their way, respect all the employees who helped the family create their success and give back to their communities and the world with a sense of gratitude and humility. In these families, parents were thoughtful about most or all of the essential developmental tasks I describe above from the earliest years of childhood.

The distinction between the child of wealth and those of modest means or even poverty is that the former context has the potential to take the struggle, frustration and hardship out of life. And these are exactly the things necessary to get “governance” on the right track.

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged , , , , | Posted on by Jeff Savlov

NY Times Quote

I’m thankful to Paul Sullivan of the NY Times for taking interest in my work and interviewing me for his December 29th Wealth Matters column, “Keeping the Family Tree Alive.”

I’ve been fortunate in my career to have worked with a wide range of interesting families from very poor and even homeless, to extremely wealthy. One of my favorite questions for wealthy families struggling with a particular challenge is, “How would this be different if you were poor?” That question goes to the heart of big decisions by removing money from the equation for a moment, leaving only family relationships and fundamental life values to be considered.

Money is powerful and has the potential for both positive and negative effects on those who have it. I work with families that have accumulated significant wealth and who want the money/wealth to serve the family in healthy and productive ways.

In my experience, those families who put family first in their thinking tend to achieve long-term harmony and productive, motivated and satisfied family members.

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged , , | Posted on by Jeff Savlov

Happy Holidays – Make an Impact!

Friends and Colleagues –

Happy Holidays and Wishing You a Great New Year!!!

A donation has been made to the Trenton Area Soup Kitchen (T.A.S.K.) in lieu of cards or gifts to our friends and colleagues. I’m coming up on my 10th year of volunteering at T.A.S.K. and it continues to be inspiring and energizing.

The Patrons struggle to get by in a city bereft of opportunity and overwhelmed by violence, drugs, and desperation. Consistently, I am impressed by the strong ties that bind the Patrons together. Over these 10 years they have slowly let me into their world and embraced me as a member of their community. I am all the better for it.

Wishing you an inspired and energized 2018 – make an impact!

Best –

Jeff

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged | Posted on by Jeff Savlov

Money Ain’t Everything

Research shows higher childhood socioeconomic status (SES) tends to be associated with positive physical health later in life. There is even some research that many believe demonstrates that high SES (i.e., significant wealth and high social class) can take the place of warm parent-child bonds.  If correct, this means that even without close, healthy parent-child relationships, a high SES will lead to positive health later in life.

However, research done last year by Matthew A. Andersson at Baylor University, shows that poor-quality parent-child relationships during childhood can negate the positive effects of high SES in terms of health over the lifespan.

Basically, “money ain’t everything” –  or stated another way, high-quality parent-child bonds are extremely important, and this supports the work I’ve been doing with parents in multigenerational wealthy families.

Across the board my clients who are parents want to ensure that the advantages of wealth do not stifle their children and lead to a lack of motivation and selfishness. This is a stereotype of family wealth, for sure, and one that exists too often. Starting early with these parents – ideally beginning to think through the issues, challenges and opportunities before they have children – is important.  Focusing on the quality of parent-child relationships is the best leverage against the potential negative effects of wealth.  Families can harness both the potential of high SES AND healthy relationships; the result is close families and mature, selfless stewards.

Last week I presented a workshop on “Raising Family Business Children” for NYCFEC (New York City Family Enterprise Center). Attendees had kids ranging in age from a year or two up through early 20’s and were active and enlightened participants, though I was particularly encouraged by the participation of parents mid-pregnancy and who were still planning for their first child in the future.

A solid emotional/relational foundation is the most powerful first step in raising family business children, stewards of generational wealth, and, honestly, everyone else.

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged , , , , | Posted on by Jeff Savlov

Start Younger Than You Think

Many years ago (and unfortunately still to some degree today) heirs had to wait for someone to die before finding out what they would inherit, with whom they would own a business or other assets, and what role they would be expected to play.  This often happened with little teaching and development to lay a healthy foundation for this intense experience and how to manage the technical, emotional and relational effects. Also, often lacking are conversations with the inheritor(s) to find out what their interests are and what they would like their lives to be like in the context of this transfer of wealth to them and even aside from it. In addition, loving conversations about what this gift means to the grantor(s) have been absent for too long.

This tends to be overwhelming to the inheritor.

Currently, there are many families who put real effort into teaching and developing the rising generation; often they are included in their 20’s and even teen years in ways appropriate to their maturity level.

The next leap is to go younger still. For example, in 1980 researchers DeCasper and Fifer gathered women in the final trimester of pregnancy. The mothers read “The Cat in the Hat” to their bellies. Shortly after birth babies preferred a recording of mother reading “The Cat in the Hat” to the actual mother reading another Dr. Seuss book. The thinking is that babies are already developing complex attachments and are internalizing experiences while still in the womb! It was not simply the mother’s voice they enjoyed, but her voice reading “The Cat in the Hat” as opposed to a different Dr. Seuss book (babies can discern the difference between the two Seuss books!)

What does this have to do with potential future involvement in a family business or inheriting an operating business or other forms of wealth? So much of the potential to develop future stewards of wealth lies in the earliest years. If a fetus in utero can have a favorite book, there are certainly many opportunities to connect with infants and toddlers in a loving and intentional manner that also prepares them for future stewardship and the challenges that inheriting can bring into their lives. See my April 2015 post for more specifics.

And the Family Business world is more receptive than ever to my ideas in this realm.

Last month I was invited to go to Cartagena, Columbia to speak to 400 family business members about the opportunities for parents in multigenerational business/wealth contexts before they even have children and during the first five years of life. Follow this link to check out the Summit and scroll down to Day One – afternoon. Google can translate if your Spanish is not up to speed 🙂

On November 17th from 8:30-10:30 am, I’ll be leading an early morning session for NYCFEC (The New York Family Enterprise Center). It is entitled Raising Family Business Children, and is intended for NYC-area couples, grandparents, husbands, wives or anyone else who has responsibility for (or may be eventually raising) children in a business-owning family. Small family businesses (<$10 million revenues) attend for FREE! Contact me if you or someone you know is interested in attending and I will get a discounted fee and additional family members will be free.

Many of the skills families can develop to raise enlightened children who are ready for the responsibilities and challenges of family business and financial success are helpful for poor families and middle-class families too. However, financial success in a family has the tendency to make life easier when it is the very challenges which wealth can lessen which are the building blocks of character, motivation and selflessness.

Posted in Family Business Consulting, Family Wealth Consulting, Wealth Psychology Consulting | Tagged , , , , , , | Posted on by Jeff Savlov